Moving home is always an expensive undertaking so if you’re thinking of doing this, you may be tempted to save costs by cutting out the middleman.
However, before you decide to dispense with the services of a mortgage broker, take a look at the following reasons why using a mortgage broker is more often than not the best way ahead.
Advise on a Mortgage
Why You Need A Mortgage Broker
1.) A Qualified Success
Choosing the best mortgage to suit your needs is essential – it’s not just a matter of choosing the cheapest option available. A mortgage broker is qualified to give you mortgage advice that is tailored to your individual situation in order to help you to choose the right mortgage for you.
New regulations mean that all call centre staff should be advisers or have to refer you to an adviser to arrange an appointment.
2.) Extra Protection
If you use a mortgage broker then he or she has a duty of care towards you and have to recommend a suitable mortgage justifying why that would be the best mortgage for you.
If the advice they offer is not suitable you have the right to complain and, maybe, receive compensation.
However, if you go to a high street mortgage lender direct and end up choosing a mortgage with repayments that prove to be beyond your means, then you don’t have much in the way of legal recourse.
Under the rules of the Mortgage Market Review, it’s the responsibility of the lender to make sure that the mortgage is affordable.
However, using a broker provides you with the protection you need to ensure that you will be able to afford the mortgage you choose.
3.) Industry Insider
During the past few years, there have been some changes in the criteria necessary for taking out a mortgage. The latest changes came in the wake of the Mortgage Market Review (MMR) and were designed to make sure that borrowers can prove affordability (even in the event of a rise in rates).
These changes and the extra checks they involve have all combined to increase application times which is why a mortgage broker is so important.
Mortgage brokers are industry insiders with a specialised knowledge and understanding of the mortgage industry. A broker deals with lenders every day as a matter of course and will have experience of the application process for each lender. This will allow a mortgage broker to let you know which lender is likely to process your application with a minimum of delay which can speed up the process for you.
The mortgage broker will also be familiar with the background criteria used by each of the lenders and can advise you on this when processing your application. A mortgage broker who has provided a substantial amount of business to a particular lender is also likely to be able to influence the lender and speed up the process for you which can make all the difference if there’s another hitch that delays things.
4.) Working for You
An independent mortgage broker is employed by you, not the lender so they should give you access to more products than if you take out a mortgage direct.
The broker will help find the best mortgage to suit your individual needs and will offer you unbiased advice and a choice of lenders with a range of subsequent financial products, rather than being restricted to the single range of products offered by a lender that you approach directly.
A mortgage broker is not limited to advising you solely on your mortgage, he or she will be able to offer information and advice on a number of other financial products such as any related life insurance, payment protection plans and the buildings and contents insurance you’ll need.
Your mortgage broker will be able to recommend insurance that’s based on your new mortgage arrangements and ensure that you have full protection in the event of redundancy, critical illness and even death.
Don’t let the fee put you off using a mortgage broker – it really is money well spent. The mortgage advice you receive will be specific to your individual situation. This is a service that’s offered by mortgage brokers and they need to make a living just as much as you do. They do this in two ways:
- Charging fees - whether it’s a one-off fee or a fee that covers advice throughout the term or the mortgage (in cases where you move home or remortgage your existing property).
- Commission - lenders and insurers will often pay the mortgage broker a commission for the business they provide.
5.) Value for Money
Mortgage brokers are legally obliged to provide their clients with a Key Facts Document covering their services and details of the fees they charge or commission they earn.
Your broker must also provide you with a Key Facts Illustration (KFI) about the specific mortgage they are recommending and details of the broker’s fees can be found in Section 8 of this publication.
The details of any commissions earned by the broker for introducing your business to the mortgage lender will be found in Section 13 of the KFI.
Mortgages are complex financial products that may be difficult for the ordinary borrower to understand. The rates, terms, lenders, features and type of insurance to choose are complex issues that are best dealt with by a mortgage broker, leaving you free to deal with other aspects of your purchase.
A mortgage broker will take a close look at your individual circumstances and recommend the right product for you based on their professional knowledge and experience – that’s what you’re paying for.
My Big Move
The Smart Choice When Choosing Mortgage Brokers
Our trusted providers can bring you the best deal for your unique house move, saving you time and money in the process!